Law Enforcement Sounds Alarm on Cell-Phone-Theft Epidemic

Law-enforcement officials are demanding that the wireless industry and lawmakers take new steps to quash a thriving black market for stolen phones

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Jonathan Ernst / REUTERS

People use their mobile phones to photograph U.S. President Barack Obama at the White House on March 18, 2013

Law-enforcement officials from San Francisco to Washington, D.C., are again sounding an alarm over mobile-phone thefts, demanding that the wireless industry, resellers and lawmakers take new steps to quash the thriving black market for boosted devices.

San Francisco District Attorney George Gascón recently held an acrimonious conference call with the nation’s largest wireless carriers and their lobbyists. “They refused to even entertain the idea of a technological solution to this,” Gascón said about the February call. “I told them in no uncertain terms that I believed they were motivated by profit and not social responsibility.” He plans to meet this week with representatives of Apple, maker of the iPhone, which is a major target of cellular thieves, to press his case for new technology that would allow phones to be permanently disabled after a theft.

In Washington, police chief Cathy Lanier says new federal laws are needed to mandate that all wireless carriers participate in new database systems that make it difficult to resubscribe stolen phones to cellular service. She is also pushing to shut down third-party buyers and resellers of phones, which she blames in part for a recent uptick in cell-phone crime reports in Washington. “Everybody is making money off the victims of street crime,” she said. “So it’s just very frustrating.”

(MORE: Obama Administration Says Mobile-Phone Unlocking Should Be Legal)

Cell-phone theft in major cities has become a national crime epidemic, like the car-stereo crime wave of the 1990s. In San Francisco, about half of all robberies now involve mobile phones, and in New York City there was a 40% increase in mobile thefts in 2012. One recent Harris poll found that nearly 10% of cellular users said their phone had been stolen at one point.

The reason is simple: the black-market resale value of the devices, like car radios two decades ago, is high. “Your mobile phone is probably the most expensive thing you carry around with you,” says Kevin Mahaffey, a co-founder of Lookout, a mobile-security company. “It’s like holding $400 up to your head.”

Nearly one year ago, law enforcement came together with the nation’s leading cell-phone carriers to make a major dent in the fastest-rising crime epidemic in American cities. They vowed to create a central database where consumers could report stolen phones to prevent them from being reactivated by any major cellular carriers. “Criminals are smart,” said New York Senator Chuck Schumer, who helped broker the deal. “Once they know that the phone is worthless, they’re not going to steal it.”

The database will be completed this fall, with the six largest cellular companies, who command about 90% of the U.S. wireless marketplace, participating. Internationally, at least 88 wireless companies in 43 countries have instituted similar databases, according to GSMA, a wireless trade group. Participating companies agree not to reactivate phones with serial numbers that have been reported stolen, which theoretically would limit their resale value. U.S. carriers have also launched a public-education campaign to encourage consumers to safeguard their phones and to report thefts. “An allegation that our members don’t care about their customers is completely inaccurate,” says Jamie Hastings, a vice president at the CTIA, a trade group for U.S. wireless-service providers and cell-phone manufacturers.

(VIDEO: Man Tracks Down Missing iPhone, Fights Alleged Thief)

Law-enforcement officials praise the database system as a step in the right direction, but there are also several obvious limitations to the new safeguards. Stolen phones can still be subscribed to carriers not participating in the database, or exported to countries that do not participate. Stolen smartphones can also still be used to connect to wi-fi networks or to run applications without a cellular connection. Finally, the unique serial numbers on phones, called the International Mobile Station Equipment Identity, or IMEI, can be changed after theft, making the database moot. Schumer has introduced a bill in Congress, which has yet to become law, that would make such alterations a domestic crime.

In San Francisco, Gascón has concluded that wireless companies and cell-phone manufactures need to develop new technologies that would allow phones to be permanently disabled remotely after a theft. There are programs on the market that allow users to remotely lock, locate or sound an alarm on their phones after thefts, but nothing that permanently disables the device, says Maheffey. But the mobile industry has yet to show interest in such a solution. “It was very obvious to me that the industry feels that they have done everything that they can do,” Gascón said after the conference call.

Meanwhile, Lanier says, third-party companies are popping up that can make it easier for criminals to make money from stolen phones. One such company, she says, is ecoATM, which has machines in the Washington area where people can exchange old cell phones for cash without interacting with a person.

On the company website, ecoATM describes in some detail the steps it takes to prevent thieves from using its service. The machine requires a scan of a valid driver’s license and the scan of a valid thumbprint from the seller. The company also checks if the serial number of the phone has been reported stolen, then holds the phone for 30 days in case it is reported stolen. The website says that “ecoATM works hard to ensure that our kiosks are the worst possible option for a criminal to sell stolen property and the best place for the victim’s property to end up if it was stolen because we can track and return it.” Like other resellers of used phones, a portion of the phones collected by ecoATM are resold overseas, where phones can retail for more, since their costs are not subsidized by wireless carriers.

Lanier says the safeguards are not enough to stop thieves from using the machines to cash in on crime. “I have been going to battle with them,” she says of the companies offering to buy used phones.

The rash of car-stereo thefts in the 1990s, which now seems like ancient history, may provide some lessons for how the cell-phone-theft wave will die down. Criminologists credit the decline to the decision of car manufacturers to install higher-quality stereos at the factory. This dried up the market for custom car stereos, which in turn dried up the black market for stolen stereos. Only time can tell what combination of new regulations and new technologies ends the current thriving black market for stolen cell phones.

MORE: Woman Documents Stolen iPhone Adventures on Facebook

51 comments
PhucHoang1
PhucHoang1

@TIME @TIMEPolitics overboard policing of what people do every day. Worry about the serious crimes like murder,rape and theft.

roknsteve
roknsteve

Somebody stole your Golden Yoyo-phone ?  Stop buying them and get a life. 

gysgt213
gysgt213

You have to ask yourslef, does the government actually care about cell phone theft or do they just want the ability to shut down phones.

AmyGKC
AmyGKC

My iPhone ws stolen n %s lst summr VZ said it cant b used againRT %s Cellphone theft-crime epidemic %sxsV

joestecco
joestecco

It's obvious why the cell phone carriers don't want to put any kind of technological solution.  If a phone is stolen, they make more money when a new phone is purchased.  If the bricked stolen phones that means there would be no incentive to steal phones causing less sales to happen.  It's all about greed.  Yes Apple is at the top of the list.  They would rather be accomplices to the thefts then to help the victims. 

80sGuy
80sGuy

The wave of car stereo theft wasn't in the 1990s, it was in the early to mid 1980s at its all-time high!

marryman
marryman

This will lead to you getting tracked by authorities at all times. (if you aren't already) DO NOT WANT. 

Maytte
Maytte

@TIME living worry free by sticking to my flip-top, dumb phone...

HankHanks
HankHanks

Adding technology to permanently disable a stolen cell phone doesn't help me, it continues to be profitable for the manufacturers, and even more so because now thieves will have to buy a new phone.  Just allow the cops to track the phone, and show up at the thief's doorstep, and get my phone back.

paulmartin200
paulmartin200

“They refused to even entertain the idea of a technological solution to this,” Gascón said about the February call. “I told them in no uncertain terms that I believed they were motivated by profit and not social responsibility." No kidding Sherlock

valdez2011
valdez2011

Thought all has a cell, a black market should not even exist. | @TIME: Cell phone theft - a national crime epidemic | ti.me\/ZOR4gcFSn

Mike_Malo
Mike_Malo

@TIME from car theft 30 years ago to cell phone theft epidemics. Look how the times have changed!!

miteshdesai
miteshdesai

“%s: Cell phone theft - a national crime epidemic | %sz2%sp%srry and one will steal it...

deconstructiva
deconstructiva

Memo to tech folks at swampland - tweets do NOT count as blog posts. Right wing trollery is bad enough, now we have to scroll past this too?

CodeStud3
CodeStud3

Cell phone theft, an epidemic? Harldly. Black on black crime. Now there's an epidemic. Talk about media priorities.

deconstructiva
deconstructiva

Thanks, Michael. Can we place bets + over / unders on GOP obstructionto these proposed changes so that (like everything else) nothing gets done in Congress? If we're not going to universal background checks / databases / etc. for gun ownership, don't bet on tracking cellphone thefts and alteration either. And will R's communicate with each other on cell phones while they stonewall this? Do ask them this when you ask follow up questions, Michael ...verbatim, no sugarcoated Beltway doublespeak. A little agitation based on truth (and irony) is always welcome ...at least outside the Beltway.